Business Day - News Worth Knowing: "Posted to the web on: 08 June 2006
Low-cost housing a joint challenge
Jean-Michel Severino
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SA, IN the full swing of national reconstruction and reconciliation, provides a favourable setting for innovation. In the areas of public-private partnerships, or of corporate environmental and social responsibility, it demonstrates an imaginative approach and makes SA a leader country in the developing world. Its policy of providing access to housing for underprivileged people is a good example.
Globally, the private sector considers social housing as high-risk, and it is the state that usually intervenes in this sector. This is unfortunate because it is an important tool in the fight against poverty and the governments should involve the private sector. This is precisely what SA is trying to do.
With 57% of the population living below the poverty line, a lot is at stake. Since 1994, the housing department has been carrying out an active public policy in order to rectify inequalities inherited from the apartheid regime and to try to improve the housing supply.
This was first reflected in the construction of 1,7-million new
units over the past decade, in the framework of the Reconstruction and Development Programme. Since 1997, the department has studied how it can encourage private banks to give home loans to low-income households. This policy was supported in 2002 by the circulation of the Community Reinvestment Bill, which establishes bank obligations for granting home loans to the poor.
However, the true success of this collaboration between the financial sector and government depends on the banks taking some responsibility. Banks made a commitment in 2003, through the financial sector charter, to invest R42bn over a five-"